Dish Network shares fell more than 3% in early trading Thursday after the satellite giant reportedly pulled its $2.2 billion bid for bankrupt wireless company LightSquared.
According to a Reuter’s report, a lawyer for an official committee appointed to oversee any potential LightSquared auction said Thursday in open court that Dish had withdrawn its bid. The Wall Street Journal first reported that Dish was considering dropping the bid Tuesday night.
Dish shares fell as much as $2.14 each (3.7%) to $55.82 per share in early trading Thursday. The stock rebounded slightly later in the day – it was priced at $56.01 per share, down 3.4% or $1.95 each as of 1:32 p.m.
LightSquared, headed by Harbinger Capital chief Philip Falcone, had planned to build a nationwide ultra-high-speed wireless data network, but ran into trouble in 2012 when the Federal Communications Commission feared its frequencies would interfere with Global Positioning Satellites. While LightSquared made moves to rectify the problem – it agreed to give up 10 MHz of spectrum adjacent to GPS frequencies and received FCC permission to experiment with sharing frequencies used by weather balloons – it never fully recovered and filed for Chapter 11 bankruptcy protection in 2012.
Dish made its $2.2 billion stalking horse bid for LightSquared in July. Harbinger opposed that move, filing a suit claiming Dish was involved in a “fraudulent scheme” to snatch up LightSquared in August. That suit was dismissed in October. Late last year Falcone had lined up a competing bidder – private equity firm Centerbridge Partners – but that offer was pulled last month over uncertainty that LightSquared’s network would receive the necessary government approvals.